Advent acquires King Koil from CITIC

The Boston-based firm plans to grow King Koil’s presence in China through online retail.

Advent International has acquired a majority stake in mattress company King Koil Shanghai Sleep System from previous owner CITIC Capital Partners, it said in a statement.

Financial terms of the transaction were not disclosed.

Mattress maker King Koil Shanghai Sleep System owns the Chinese trademark for King Koil, a US brand founded in 1898, and is China’s exclusive licensee of other international mattress brands like Aireloom and Life Balance.

CITIC acquired a control stake in King Koil in 2014 through its 2009-vintage CITIC Capital China Partners II, which raised $925 million against a $750 million target, according to PEI data. The fund targets healthcare and industrials companies in China.

Under CITIC’s two-year ownership, King Koil expanded its business in China, streamlined operations, and grew its retail segment by strengthening its place in the hotel market.

Filippo de Vecchi, Advent International managing director and co-head of Greater China said in a statement the firm intends to grow King Koil in its next stage of development which includes boosting China’s presence in its existing cities, expanding to other cities within China as well as increasing its online presence.

Advent, with $40 billion under management, invests in chemicals, healthcare, education and retail sectors in Asia. Among its recent investments are Indian consumer products company Crompton Greaves Consumer Electricals Limited, Queensland-based Noosa Yoghurt, Singapore-based education provider Learning Lab, and mattress company Serta Simmons Bedding.

In March this year, the firm closed its eighth flagship buyout fund, Advent International Global Private Equity VIII, on its $13 billion hard-cap after six months in market, with 90 percent of fund commitments from existing returning investors.

CITIC Capital Partners, the private equity arm of CITIC Capital Holdings, has over $7.9 billion under management across private equity, real estate, structured finance, and venture capital funds.

The firm is in the process of raising two funds: CITIC Capital Japan Partners III, launched last year with a target of ¥25 billion ($250 million; €220 million) and CITIC Capital China Partners III, which aims to raise $1.5 billion, of which $1.2 billion will be raised in US dollars and $300 million in renminbi.

BDA Partners and Latham & Watkins advised CITIC, while Weil, Gotshal & Manges advised Advent on the transaction.